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Subject: Irrigation Wells
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DavidF22
(New York)

Posts:91


06/24/2021 5:10 AM  
I am looking for advice on the drilling of private wells to provide irrigation. Our 60-acre complex has extensive lawns and irrigates them with municipal water. Our water bills are relatively modest, working out to $35 per month for each of 55 homes. We have normal watering restrictions (certain hours and days) but our Board sometimes violates them. Occasional pressure changes mean that water sometimes may not reach the very last head on a sprinkler line, but that is not a major issue. Two Board members have grandiose, self-dealing plans to install seven figures worth of new plantings. They have no intention to seek a community vote on the plantings or wells.

The wells have been touted as “free water,” but we would have to drill three of them at a current cost of $200K+. We would need state and municipal permits and either entity would have ultimate control over the wells’ operation, meaning they could be shut down at any time. The wells would have to be sunk below the drinking water aquifer and we would have to seal them and provide assurances that there would be no intrusion into the drinking supply.

Our Board is not very competent, would do little to no research before acting and doesn’t feel the need to get the community’s permission. Our management company is useless. So here are my questions:

Is the $200K realistic for three wells?
What would be the cost of piping from wells to the sprinkler system?
Could the new pumps create such pressure that the piping in the entire (30-year-old) irrigation system would have to be changed?
How long do pumps last, what repairs might be needed and what does it cost to replace them?
How much electricity do the pumps use (we live in a high-cost power area)?
The wells would be about a mile from a large body of salt water. Would we need to worry about salt water intrusion?
The quality of the pumped water is unknown. What could be the effect on lawns, plantings, siding, car finishes, driveways, etc.? Would we need filters or other extra equipment?
Is all this new infrastructure a major added burden to future Boards when the current one has trouble running the existing complex properly?

I realize not all these questions can be answered specifically, but any information would be helpful. Some of us in the community believe this would become a financial and managerial quagmire, and would only enrich our landscape and irrigation contractors. The Board is relying solely on the advice of these contractors. Thanks!
SheliaH
(Indiana)

Posts:4290


06/24/2021 6:51 AM  
You have good questioba, which you and your neighbors need to ask your BOARD and demand answers if the try to blow you off or talk in circles. Since we don't live in your community, we can't say If $200K is realistic - that's why the board needs to get several bids (at least three) and review each of them.

You didn't mention your reserve fund - do you have one? When was the last reserve study ( if older than five years, it's time for a new one)? Is it being funded appropriately? If wells are the association's responsibility, it may be there's not enough in reserves to pay for the work, thus the $200K pricetag.

If this board is as incompetent as you say, the next question is why you and your neighbors have put up with this for however long they've served. When homeowners don't pay enough attention, this is the result, so all of you need to start demanding answers and if you don't get them, your choice is to either vote them out in the next election, recall them (check your documents to see how that's done, starting with how to call special homeowner meetings).

Of course, you'll need others willing to stand up and serve - and YOU may need to be one of them. Then you can address the property manager. People often complain about "useless" managers and they do exist, but remember they work at the board's direction. If you don't tell them what you want done, they can't go off on their own and do it. And you can't tell them about less you're clear in what you want.

Maybe the property manager has tried to guide this board in the right direction, but they're too addled to notice or don't care (perhaps both). If you change the board, you can have a chat with the property manager so both sides understand each other. After watching them up close, you'll know if you need to make a change.

In the mean, you might offer to help the board research this project by asking by prospective contractors these questions and reporting to the board with some recommendations. You don't always know what you don't know and right now, youre probably as befuddled as the board, but at least you're smart enough to recognize it.
AugustinD


Posts:1920


06/24/2021 6:55 AM  
DavidF22, I think your questions are better suited for an online forum about wells. Try:

https://permies.com/f/164/wells-springs
JackJ9


Posts:0


06/24/2021 7:23 AM  
Our HOA owns 4 wells.

Here's my answers to your questions, to the best of my knowledge.

Is the $200K realistic for three wells?
Probably. All depends on depth of well. Cost would include running electricity to well, well pump, and well drilling cost.


What would be the cost of piping from wells to the sprinkler system?
Relatively cheap.


Could the new pumps create such pressure that the piping in the entire (30-year-old) irrigation system would have to be changed?
No.


How long do pumps last, what repairs might be needed and what does it cost to replace them?
Our wells have needed regular maintenance at a couple thousand per y ear.


How much electricity do the pumps use (we live in a high-cost power area)?
Our electric bills are cheap, about $30 per month per well. We use a lot of water.


The wells would be about a mile from a large body of salt water. Would we need to worry about salt water intrusion?
No idea.

The quality of the pumped water is unknown. What could be the effect on lawns, plantings, siding, car finishes, driveways, etc.? Would we need filters or other extra equipment?
Maybe, depending on what is in the water.


Is all this new infrastructure a major added burden to future Boards when the current one has trouble running the existing complex properly?
Your reserve study would say that money should be set aside for the known cost of the well maintenance. Probably not a lot money.

Bigger concern to me is the maintenance cost associated with a 7 figure planting job. That will require regular landscaping and periodic changing of dead plants, and eventual replacement, etc.
DavidF22
(New York)

Posts:91


06/24/2021 7:53 AM  
Thanks to all for sound advice, especially for Jack for trying to take a stab at some answers. Our larger problem is that our community is thoroughly dysfunctional, with the vast majority of homeowners apathetic and the management of the place inept at best and corrupt at worst. It's clear we need to fix that before getting into any discussion of wells or other ill-conceived projects.
AugustinD


Posts:1920


06/24/2021 8:01 AM  
Posted By DavidF22 on 06/24/2021 7:53 AM
It's clear we need to fix that before getting into any discussion of wells or other ill-conceived projects.
I agree.

I wonder if a booster pump might be a far easier fix to the occasional low pressure problems.

You all should be able to do some back-of-the-envelope calculations about how long it would take for the wells to pay for themselves (via the savings from not paying the city water bill). Maintenance costs would have to be factored in as well. How much is the annual water bill to the HOA right now?
AugustinD


Posts:1920


06/24/2021 8:14 AM  
Posted By AugustinD on 06/24/2021 8:01 AM
How much is the annual water bill to the HOA right now?
Oops on me. DavidF22 posted:
Posted By DavidF22 on 06/24/2021 5:10 AM
Our water bills are relatively modest, working out to $35 per month for each of 55 homes.
...
The wells have been touted as “free water,” but we would have to drill three of them at a current cost of $200K+.


$35 x 12 x 55 = annual HOA cost of about $23,000 per year for city water

JackJ9 observed that his HOA was paying "a couple thousand" per year for maintenance of his HOA's four wells. Let's figure $1500 per year for DavidF22's proposed three wells.

From the net, assume life expectancy of well pumps is 10 to 15 years. Pumps cost from $400 to $2000, depending.

Unforeseen problems will cost _____?

I'd say that, on paper, the wells are worth it, paying for themselves after say 10 to 15 years.

I personally would not want to add the headaches of well maintenance to the plates of volunteer directors. JackJ9 undoubtedly can comment on whether the latter concern is mis-placed. I hope he will.
AugustinD


Posts:1920


06/24/2021 8:25 AM  
I was looking at a townhome community the other day. Vertical shared walls. Ten units total. Owners are responsible for their own roofs (and the architectural layout so far suggests this makes sense). The only common area costs are for a well and a couple of septic tanks. But I figure this non-condo HOA has at least a three-person board. Given that there are only ten owners, the chances of someone other than myself stepping up would be small (compared to, say, a 500 unit townhome community). For all I know, a single person pretty much runs things. I might very well not like how the board runs things, and so I could land back on a board, doing a lot of work for nine others.

Meanwhile a small single family home would beckon, where the work to maintain a well and septic (if these were present) would be far less.

Because of the shared walls, and despite the minimal common (but vital) elements (well and septic), I told the realtor I would not consider this community.
DavidF22
(New York)

Posts:91


06/24/2021 8:31 AM  
Thanks for your comments.

Our annual municipal water bill is about $23,000, or $35 per home per month (about 3% of the overall monthly charges), and no one in the community is concerned with it. Wells are being pushed by some self-dealers on the Board who want to spend seven figures on over-the-top, lush plantings without the homeowners' consent and realize they must use additional water and extend the irrigation system to do so. They are telling the homeowners nothing and their principal advisors are the longtime landscape and irrigation contractors, both of whom stand to profit mightily. Most homeowners have no clue and many won't want to know until they are suddenly shocked by huge bills for the wells and plantings. Then they'll come crying to the minority who currently see what a scam this is.

At the urging of the minority, the Board commissioned the first reserve study last year in the 30-year history of the community. They used one of the recognized companies. The problem is that the study engineers in the report explicitly disavowed any recommendations regarding landscaping or wells and noted that those items had been inserted solely by the Board, contractors and/or management company. So even the study was compromised over these self-dealing issues. In the Board-inserted information on the wells, we were told that three would initially cost a little more than $100K, which, as you know, is a gross underestimation of the actual costs of installation and maintenance. This is how our current Board rolls. And, unfortunately, it is intellectually incapable of performing the sound due diligence that you and others so wisely recommend.

JackJ9


Posts:0


06/24/2021 8:33 AM  
The only real issue with an irrigation-only well for an HOA is that the well can fail and nobody notices until everything dies. Then add a few weeks to get a contract signed with a well vendor and get a repair done, there is a very real chance that you will lose a lot of vegetation.

I've really scratched my head at a more automated approach to monitoring whether the wells are operational all summer long, but haven't found a great method to dae.
DavidF22
(New York)

Posts:91


06/24/2021 8:45 AM  
I realize we should be planning for the future, but a 10-15 year payback on the wells won't garner much support from a population that is largely older and likely won't be here to reap the benefits. Furthermore, our aging roads, curbs and recreational amenities -- and not any wells -- were the primary concerns of the engineers in the reserve study, and as expected, they provided schedules of the costs and how we would accumulate and apply reserves to these higher-priority projects. Our Board has not addressed these at all, instead focusing on the wells as the pet project of the self-dealers. Some directors even said they thought the reserve study was a waste of time and want to discard it, probably because they couldn't get the engineers to endorse the wells and landscaping. This is what we are up against.
AugustinD


Posts:1920


06/24/2021 8:49 AM  
Posted By DavidF22 on 06/24/2021 8:31 AM
The problem is that the study engineers in the report explicitly disavowed any recommendations regarding landscaping or wells and noted that those items had been inserted solely by the Board, contractors and/or management company.
[Snicker, along with DavidF22 probably] I can just imagine the conversation the reserve study engineers had with the board about this. Try:

RS Engineer:
You realize that wells are not listed in your covenants as a common element, right?

Board:
So? We're the Board. We call the shots.

RS Engineer:
[brow furrowed]
You realize that the HOA would have to amend the covenants to add wells, right?

Board:
That's a matter of opinion.

RS Engineer:
You realize it misleads the membership to include an item in the reserve study that has never before been included and for which city water currently, and consistent with the covenants, adequately substitutes.

Board:
Do you want us to pay you for this reserve study or not?

RS Engineer:
We'll do what you ask, but heavily asterisking this. We have licensing standards.



So even the study was compromised over these self-dealing issues. In the Board-inserted information on the wells, we were told that three would initially cost a little more than $100K, which, as you know, is a gross underestimation of the actual costs of installation and maintenance. This is how our current Board rolls. And, unfortunately, it is intellectually incapable of performing the sound due diligence that you and others so wisely recommend.

-- Where I am, I think wells run way deeper than New York, and maybe cost $15,000 to dig and for the pump room et cetera, supplying all the water for one household. I am not sure the figure your board found is grossly off.

-- I can't say this is self-dealing. It's not like only one director benefits from the wells.

-- Regardless, I think you ought to try to get new directors on the board. Like you, I do not like how these directors are thinking. I keep in mind that $200,000 spread over 55 owners is a $3600 special assessment. Has this been factored in? Is your HOA Board considering the IMO evil four letter word "loan"? I hope not.
AugustinD


Posts:1920


06/24/2021 9:00 AM  
Posted By DavidF22 on 06/24/2021 8:45 AM
Some directors even said they thought the reserve study was a waste of time and want to discard it, probably because they couldn't get the engineers to endorse the wells and landscaping. This is what we are up against.
FWIW I think the typical HOA/COA director does not understand reserve studies. It's higher math (for them). They often are inclined to ignore the reserve studies. Instead, they win re-election by claiming they are going to keep the members' assessments as low as possible. Read: Infrastructure is neglected, causing failure of xyz sooner rather than later, causing the need for a large special assessment. Enough problems may ultimately lead to receivership.

I agree about how the focus should be on existing infrastructure needs. Throw the bums out at the next annual meeting and annual election. Put in new directors whose response to well questions is: "No, we're not going to do this. Next question."
JackJ9


Posts:0


06/24/2021 9:08 AM  
AugustinD -

For what's it is worth, our board convinced our reserve study to put an item that doesn't exist, on our reserve study, so we're currently setting reserves aside for something that doesn't exist. I'm not sure how that works, but it happened.
DavidF22
(New York)

Posts:91


06/24/2021 9:52 AM  
Thanks for the laugh, AugustinD. I needed that (although you're making our Board out to be far more intelligent than it actually is).

We are already paying a $4320 assessment this year, with the Board not saying specifically how it will be applied and it is not directly tied to any of the spending schedules in the study. I believe homeowners view it as the price they pay to avoid Board service. We have been paying assessments of $2850 to $4320 a year for the eight years I've been here because earlier Boards never set aside reserves needed primarily to replace roofs.

The self-dealing arises because no one in the community wants or even cares about lavish landscaping except for two Board members. One of them has actually said he believes the fees should be raised much higher than necessary because larger dues and assessments lend an aura of luxury to the place and will help to increase property values. One Board member told a neighbor that "we can do anything we want" and if you read the governing documents, they are pretty much right. You can't make this stuff up.
JackJ9


Posts:0


06/24/2021 10:22 AM  
Posted By DavidF22 on 06/24/2021 9:52 AM
Thanks for the laugh, AugustinD. I needed that (although you're making our Board out to be far more intelligent than it actually is).

We are already paying a $4320 assessment this year, with the Board not saying specifically how it will be applied and it is not directly tied to any of the spending schedules in the study. I believe homeowners view it as the price they pay to avoid Board service. We have been paying assessments of $2850 to $4320 a year for the eight years I've been here because earlier Boards never set aside reserves needed primarily to replace roofs.

The self-dealing arises because no one in the community wants or even cares about lavish landscaping except for two Board members. One of them has actually said he believes the fees should be raised much higher than necessary because larger dues and assessments lend an aura of luxury to the place and will help to increase property values. One Board member told a neighbor that "we can do anything we want" and if you read the governing documents, they are pretty much right. You can't make this stuff up.




David, please consider scaling back your inflammatory language. The board is in place to make decisions on the landscaping. Your example of two board members wanting landscaping that you do not is not self-dealing. Self-dealing is if the board members owned a landscaping company and hired their own company to do the landscaping.

The board indeed is there to make decisions on how much revenue to collect from homeowners and how to spend this money. That, by definition, is what the HOA board does. Making a decision to spend it the way the directors want it spent is NOT self-dealing.

If you are annoyed, inquire as to how you can join the board of directors. I am sure they have some turnover, and then you will have a say in how your association is run.
AugustinD


Posts:1920


06/24/2021 10:45 AM  
Posted By JackJ9 on 06/24/2021 9:08 AM
AugustinD -

For what's it is worth, our board convinced our reserve study to put an item that doesn't exist, on our reserve study, so we're currently setting reserves aside for something that doesn't exist. I'm not sure how that works, but it happened.
JackJ9, FWIW; depending on the specific proposed "new" capital asset; and given how technological advances are inevitable and may make certain infrastructure obsolete; I think there is often a question as to whether a "new item" is something that goes beyond what the governing documents permit, or is in fact covered under, for one, what is called the "business judgment" rule for boards.

KerryL1 pointed out recently that much infrastructure simply is not explicitly mentioned in many HOAs/COAs governing documents. She is right. Interestingly, KerryL1 is a director on the board of a CIC (common interest community hoa/coa yada) that, under a 2012 California statute, now pretty much // has // to provide electric vehicle charging stations for the parking space of any owner who requests it. Yes, the owner has to pay her or his share, but the practical realities cause this to alter the common area significantly. To me, her board is 'stuck' with the reality of technological advances and legislative orders, regardless of what her CIC's covenants state.

I was thinking about this for the wells in this thread. I think DavidF22's HOA's contracted reserve study engineers did right in arguing with the board about the inclusion of the wells. In other words, the reserve study company and I agree the Board is freakin' out of line.

AugustinD


Posts:1920


06/24/2021 10:50 AM  
Posted By DavidF22 on 06/24/2021 9:52 AM
We are already paying a $4320 assessment this year, with the Board not saying specifically how it will be applied and it is not directly tied to any of the spending schedules in the study. I believe homeowners view it as the price they pay to avoid Board service.
You are good. Seriously, I bet your combined SATs (before the adjustment some years ago) broke 1400 at least.

This is my thinking often these days too: Get on the board and give up hours of time for little reward. Or pay extra because the incumbent board is not-so-bright but also not a disaster.


We have been paying assessments of $2850 to $4320 a year for the eight years I've been here because earlier Boards never set aside reserves needed primarily to replace roofs.

The self-dealing arises because no one in the community wants or even cares about lavish landscaping except for two Board members. One of them has actually said he believes the fees should be raised much higher than necessary because larger dues and assessments lend an aura of luxury to the place and will help to increase property values. One Board member told a neighbor that "we can do anything we want" and if you read the governing documents, they are pretty much right. You can't make this stuff up.
I figure the Board may be right when it comes to the board being empowered to do anything it wants regarding landscaping. Often I think it comes down to what the meaning of "maintain the common areas" is. The courts tend to react by pointing out that the membership can always get a new board, if enough people want a new board. The courts are right.
DavidF22
(New York)

Posts:91


06/24/2021 11:24 AM  
Posted By JackJ9 on 06/24/2021 10:22 AM
Posted By DavidF22 on 06/24/2021 9:52 AM
Thanks for the laugh, AugustinD. I needed that (although you're making our Board out to be far more intelligent than it actually is).

We are already paying a $4320 assessment this year, with the Board not saying specifically how it will be applied and it is not directly tied to any of the spending schedules in the study. I believe homeowners view it as the price they pay to avoid Board service. We have been paying assessments of $2850 to $4320 a year for the eight years I've been here because earlier Boards never set aside reserves needed primarily to replace roofs.

The self-dealing arises because no one in the community wants or even cares about lavish landscaping except for two Board members. One of them has actually said he believes the fees should be raised much higher than necessary because larger dues and assessments lend an aura of luxury to the place and will help to increase property values. One Board member told a neighbor that "we can do anything we want" and if you read the governing documents, they are pretty much right. You can't make this stuff up.




David, please consider scaling back your inflammatory language. The board is in place to make decisions on the landscaping. Your example of two board members wanting landscaping that you do not is not self-dealing. Self-dealing is if the board members owned a landscaping company and hired their own company to do the landscaping.

The board indeed is there to make decisions on how much revenue to collect from homeowners and how to spend this money. That, by definition, is what the HOA board does. Making a decision to spend it the way the directors want it spent is NOT self-dealing.

If you are annoyed, inquire as to how you can join the board of directors. I am sure they have some turnover, and then you will have a say in how your association is run.




I won't get into any more detail, although I have served on my Board as president, but let's just say your scolding would sound extraordinarily naive to the enlightened and informed people in our community. Your place sounds relatively normal and you should be thankful for that. Also, when one Board member plans to use over $1.5 million of community money for a personal landscaping project that no one else asked for -- without providing details, having discussions or asking permission from the people who are paying -- that's self-dealing.
JackJ9


Posts:0


06/24/2021 11:48 AM  
Posted By DavidF22 on 06/24/2021 11:24 AM
Posted By JackJ9 on 06/24/2021 10:22 AM
Posted By DavidF22 on 06/24/2021 9:52 AM
Thanks for the laugh, AugustinD. I needed that (although you're making our Board out to be far more intelligent than it actually is).

We are already paying a $4320 assessment this year, with the Board not saying specifically how it will be applied and it is not directly tied to any of the spending schedules in the study. I believe homeowners view it as the price they pay to avoid Board service. We have been paying assessments of $2850 to $4320 a year for the eight years I've been here because earlier Boards never set aside reserves needed primarily to replace roofs.

The self-dealing arises because no one in the community wants or even cares about lavish landscaping except for two Board members. One of them has actually said he believes the fees should be raised much higher than necessary because larger dues and assessments lend an aura of luxury to the place and will help to increase property values. One Board member told a neighbor that "we can do anything we want" and if you read the governing documents, they are pretty much right. You can't make this stuff up.




David, please consider scaling back your inflammatory language. The board is in place to make decisions on the landscaping. Your example of two board members wanting landscaping that you do not is not self-dealing. Self-dealing is if the board members owned a landscaping company and hired their own company to do the landscaping.

The board indeed is there to make decisions on how much revenue to collect from homeowners and how to spend this money. That, by definition, is what the HOA board does. Making a decision to spend it the way the directors want it spent is NOT self-dealing.

If you are annoyed, inquire as to how you can join the board of directors. I am sure they have some turnover, and then you will have a say in how your association is run.




I won't get into any more detail, although I have served on my Board as president, but let's just say your scolding would sound extraordinarily naive to the enlightened and informed people in our community. Your place sounds relatively normal and you should be thankful for that. Also, when one Board member plans to use over $1.5 million of community money for a personal landscaping project that no one else asked for -- without providing details, having discussions or asking permission from the people who are paying -- that's self-dealing.




If no one wants to pay the money, then all you have to do is follow the process to not ratify the budget and then the board won't have the money, or a different board could be voted in. Since neither are happening, I don't believe that there is consensus in the community that the project is not worthwhile.
AugustinD


Posts:1920


06/24/2021 11:55 AM  
Posted By JackJ9 on 06/24/2021 11:48 AM

If no one wants to pay the money, then all you have to do is follow the process to not ratify the budget and then the board won't have the money,
Nationwide, it's rare that covenants permit the membership to reject a budget and tie the hands of the board as you propose. I particularly doubt New York HOA/COA covenants have such a provision. I would bet New York HOA/COA statutes do not.

By my reading over the years, New York is really sh-tty when it comes to its HOA/COA statutes.
JackJ9


Posts:0


06/24/2021 12:03 PM  
Posted By AugustinD on 06/24/2021 11:55 AM
Posted By JackJ9 on 06/24/2021 11:48 AM

If no one wants to pay the money, then all you have to do is follow the process to not ratify the budget and then the board won't have the money,
Nationwide, it's rare that covenants permit the membership to reject a budget and tie the hands of the board as you propose. I particularly doubt New York HOA/COA covenants have such a provision. I would bet New York HOA/COA statutes do not.

By my reading over the years, New York is really sh-tty when it comes to its HOA/COA statutes.




I am not familiar with CC&Rs nationwide, but I had the assumption that most budgets had to be ratified each year. The bar to not ratify the budget is a high bar to cross and it would be rare not to ratify the budget, but could happen in theory.
AugustinD


Posts:1920


06/24/2021 12:21 PM  
Posted By JackJ9 on 06/24/2021 12:03 PM
I had the assumption that most budgets had to be ratified each year. The bar to not ratify the budget is a high bar to cross and it would be rare not to ratify the budget, but could happen in theory.
No, not in theory.

Do your own covenants give the membership the power to reject a budget?

Your own Oregon statutes state that the Board adopts the budget.

If a HOA/COA membership does not like a Board's budget, it can recall the Board or install new directors at the next election.
DavidF22
(New York)

Posts:91


06/24/2021 12:27 PM  
Yes, New York may have the least protections for HOA owners in the country. We get three choices: 1) try to replace the Board, 2) file a costly lawsuit with uncertain results, or 3) move.

We don't get to ratify the budget. We have not had an election since 2016 because after the ugliness of that vote which broke the community apart socially, we can't get more than five candidates to run at a time. So we take whoever volunteers and I can assure you it isn't the cream of the neighborhood. The unelected Board (sometimes with only the state minimum of three directors) simply presents us with a budget and tells us what the annual dues and assessment will be. We can ask questions, but there is no vote on the budget. For the past few years, the Board has routinely set the fees as they choose, often without regard to the actual expenses. So last year, for example, our dues were 28% higher than actual expenses. This year, they tried to charge us dues that were 44% higher than actual 2020 expenses and the community rebelled, not through a vote but through nasty e-mail exchanges. Oh, the monthly dues were brought down to a more reasonable level, but then our annual assessment was increased 52% without any explanation of how the money is being used.

I should add that we often operate with director vacancies because the Board does not approach or accept appointees who won't keep their secrets or go along with their schemes. It's a real circus. I think there's a sitcom in it.
AugustinD


Posts:1920


06/24/2021 12:37 PM  
Posted By DavidF22 on 06/24/2021 12:27 PM
For the past few years, the Board has routinely set the fees as they choose, often without regard to the actual expenses. So last year, for example, our dues were 28% higher than actual expenses.
Are you aware that assessments of a well-run HOA are always set higher than the projected annual operating expenses? Why is this? It's because of the need to pay not just the expected annual operating expenses, but also to save money every year via a reserve fund. A reserve fund spreads the costs of major infrastructure over as many owners over the years as possible, in the name of fairness.

I do not consider this a sitcom. I think it's the members doing as you suggested: They'd rather pay extra than serve on the board. The Board may be out of line, but this is because the members choose a board (or exercise their right to be apathetic and so "vote" for the status quo) that is out of line.
DavidF22
(New York)

Posts:91


06/24/2021 12:50 PM  
Posted By AugustinD on 06/24/2021 12:37 PM
Posted By DavidF22 on 06/24/2021 12:27 PM
For the past few years, the Board has routinely set the fees as they choose, often without regard to the actual expenses. So last year, for example, our dues were 28% higher than actual expenses.
Are you aware that assessments of a well-run HOA are always set higher than the projected annual operating expenses? Why is this? It's because of the need to pay not just the expected annual operating expenses, but also to save money every year via a reserve fund. A reserve fund spreads the costs of major infrastructure over as many owners over the years as possible, in the name of fairness.

I do not consider this a sitcom. I think it's the members doing as you suggested: They'd rather pay extra than serve on the board. The Board may be out of line, but this is because the members choose a board (or exercise their right to be apathetic and so "vote" for the status quo) that is out of line.





I should have been clearer that the 28% and 44% figures mentioned above were only for the monthly dues that cover annual operating expenses. We are also charged a separate four-figure annual assessment, which would presumably go to reserves. However, our Board chooses not to specify how the money would be used and our governing documents give them enormous leeway. This is a concern because, several years ago, a contingent of us went down to the management office to look at invoices and we discovered that the Board had been dipping into reserves to cover excess spending 123% over budget in a single year. The thing is, in recent years, we have seen hundreds of thousands of dollars wasted. If I could show you photos of our complex eight years ago and today, you'd ask where all the money went.

You are spot on in saying that it's the homeowners' fault. Nearly all of the problems in our complex are caused by the residents themselves.
JohnC46
(South Carolina)

Posts:11665


06/24/2021 1:12 PM  
Approving budgets/dues increases. Our Covenants allow the BOD to increase our dues as much as the BOD wants to. There are procedures:

1. The upcoming Years Budget (showing the increase) must be submitted to owners on or before 01/01 to become effective on 01/01.

2. The owners have until 01/31 to call a Special Meeting at which 51% OF ALL OWNERS must vote to reject the new budget.

3. If the new budget is rejected, there is an automatic 5% dues increase and the association must operate under that budget.

Thus our owners do not get to approve a new budget, but they do get to reject it.

JackJ9


Posts:0


06/24/2021 1:17 PM  
I don't believe that there is no provision to reject a budget. If not, they could set dues at $1,000,000 and then force everyone into foreclosure when people don't pay. There must be a provision to reject an unreasonable budget.
DavidF22
(New York)

Posts:91


06/24/2021 1:37 PM  
We have absolutely no provision to reject a budget except to throw out the Board, and install a new one with a better budget. We went through a review of this a few years ago when some of us realized our governing documents contain absolutely no spending limits on the Board. Besides, in 2017, a new Board promising better management and more efficiency proceeded to go $125,000 over budget for the year by dipping into the aforementioned reserves. They stayed on for the following year without consequences until they decided to quit. So even if the budget is acceptable to the community, a free-spending, opaque Board can easily exceed it by thousands of dollars and no one would know until the following year’s audited financials are published. By then, the money’s been spent. It’s too late to reject anything.
AugustinD


Posts:1920


06/24/2021 1:50 PM  
DavidF22, thank you for elaborating.

JackJ9, duly noted.

JohnC46, thank you for sharing.
JohnC46
(South Carolina)

Posts:11665


06/25/2021 9:11 AM  
Posted By JohnC46 on 06/24/2021 1:12 PM
Approving budgets/dues increases. Our Covenants allow the BOD to increase our dues as much as the BOD wants to. There are procedures:


1. The upcoming Years Budget (showing the increase) must be submitted to owners on or before 01/01 to become effective on 01/01.

2. The owners have until 01/31 to call a Special Meeting at which 51% OF ALL OWNERS must vote to reject the new budget.

3. If the new budget is rejected, there is an automatic 5% dues increase and the association must operate under that budget.

Thus our owners do not get to approve a new budget, but they do get to reject it.




I got ahead of myself:

1. The upcoming Years Budget (showing the increase) must be submitted to owners on or before 12/01 to become effective on 01/01.

2. The owners have until 12/31 to call a Special Meeting at which 51% OF ALL OWNERS must vote to reject the new budget.
DavidF22
(New York)

Posts:91


06/25/2021 9:26 AM  
In New York, it takes just 10% of members to demand the Board call a special meeting. if the Board doesn’t schedule one within a certain time limit, the 10% can hold one on their own and, with a quorum, transact actual business there. This is under the state’s Non-Profit Corporation Law, which in some cases may supersede our governing documents. The problem we have is that our Board has unlimited powers in our governing documents to set whatever fees they want and our only recourse to change that is to remove the Board or alter the bylaws, both requiring a two-thirds vote.

The state also requires Board members to complete and sign an annual statement disclosing any personal or business relationships with association contractors, but ours never fulfills that requirement (although the optics in our community would indicate they’d have to do plenty of writing). There is no state agency that will address a complaint about such a violation. You still have to hire an expensive attorney and sue . . . and for what?
WilliamC21
(New Jersey)

Posts:4


06/25/2021 12:49 PM  
Forgive me if I am wrong, but if only one Board member wants to do something, why will it be done? Wouldn’t the entire Board have to have a vote on something this large of an expense? Dos the Board have monthly meetings which are open to the HO members who could object (or approve) plans or expenses? Just my opinion.
JackJ9


Posts:0


06/25/2021 6:07 PM  
Posted By WilliamC21 on 06/25/2021 12:49 PM
Forgive me if I am wrong, but if only one Board member wants to do something, why will it be done? Wouldn’t the entire Board have to have a vote on something this large of an expense? Dos the Board have monthly meetings which are open to the HO members who could object (or approve) plans or expenses? Just my opinion.




Not only does the whole board have to vote on something, the overall HOA membership have to write the checks to pay for it. If the overall membership doesn't agree with the expenditure and refuses to pay, then the expenditure doesn't get spent.
DavidF22
(New York)

Posts:91


06/26/2021 4:59 AM  
William and Jack make excellent points that would apply to a normal community. We are currently down to three board members, each of whom would vote for the wells without doing thorough research. We don’t know if and when they will tell the community that a fourth director has resigned. (They never filled the vacancy of a fifth seat.) If they did solicit for candidates, no one would apply and any applicants could be rejected if they didn’t agree with the Board and its secrecy. Individuals who go to a board meeting to object to wells may not get all services due them or get their normal complaints and issues addressed. If people refuse to pay, the board can impose mounting late fees leading to foreclosure, and a judge will back them up because they are seated board members and have the authority to loot reserves to pay for wells.

The sane minority will likely have to organize and write a letter to the community outlining all the hidden costs of wells. Some of the sheep may then come out of the woodwork and state their opposition. That could cause the board to back off. This method has worked before with their outrageous overcharges for fees. Of course, the letter-writers could then be targeted to receive fewer services. That has happened before, too.
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